Government Initiatives for Leather Sector Revamp

1. Indian Footwear and Leather Development Programme (IFLDP)

• Launched: 2021

• Budget: Rs 1,700 crore (2021–26)

• Objectives:

  • Develop infrastructure for leather clusters.

  • Promote sustainability and modernization through green technologies.

  • Enhance design and product development capabilities.

  • Provide skilling and upskilling opportunities for workers.

• Components:

  • Mega Leather Clusters Development.

  • Integrated Development of Leather Sector (IDLS) sub-scheme.

  • Sustainable Technology and Environmental Promotion (STEP).

  • Skill development initiatives.

2. Council for Leather Exports (CLE)

• Role:

  • Apex body under the Ministry of Commerce and Industry.

  • Facilitates market access, organizes international buyer-seller meets, and assists in policy advocacy for exporters.

3. Proposed Production Linked Incentive (PLI) Scheme for Leather

• Proposed in: Union Budget 2025–26.

• Budget: Rs 2,600 crore.

• Aims:

  • Achieve a turnover of Rs 4 lakh crore.

  • Generate 2.2 million new jobs.

  • Boost domestic value addition and reduce dependence on imports.

  • Encourage green manufacturing and quality certifications.

Geographical Perspective

• Kanpur, Uttar Pradesh:

  • Located on the south bank of the Ganga River, Kanpur historically thrived due to its access to water, transportation links, and industrial labor.

  • Part of the Indo-Gangetic plain, which supports diverse industries but faces acute environmental stress.

• Ramaipur:

  • A suburban locality of Kanpur, chosen for its available land and strategic location with access to major highways and railways, making it ideal for large-scale industrial hubs.

• Environmental Sensitivity:

  • The Ganga Action Plan and continuous monitoring by the NGT make pollution control an essential component for any future industrial cluster in the area.

Challenges Facing India’s Leather Industry

1. Decline in Exports

• India's leather and leather goods exports fell by nearly 10% in FY24, largely due to sluggish demand from major markets like the US and Europe.

• Tamil Nadu, the country's top leather exporter, witnessed an 18% decline, heavily impacting overall national figures.

• The Russia-Ukraine conflict disrupted the Eurozone economy, further contracting global demand.

2. Threat from Synthetic Substitutes and Innovation Deficit

• The surge of eco-friendly alternatives — faux leather, cork leather, ocean leather, microfiber, and vegan leather — is steadily eroding leather's traditional market share.

• These substitutes are cheaper, cruelty-free, and increasingly preferred by environmentally conscious consumers, especially in Europe and North America.

• India’s slow pace of innovation and limited R&D investment are undermining its global competitiveness.

3. Environmental Compliance and Pollution Burden

• Tanning is inherently polluting, generating toxic chemical waste such as hexavalent chromium.

• Many units lack modern effluent treatment facilities, exposing workers to hazardous conditions without adequate protection.

• Growing regulatory scrutiny around environmental health is forcing the closure of non-compliant tanneries, particularly in hubs like Kanpur and Unnao.

4. Regulatory and Raw Material Constraints

• Bans on slaughterhouses and restrictions on cattle trade have choked the availability of hides, raising input costs.

• The GST regime increased operational expenses by 6–7%, disproportionately hurting MSMEs.

• Stricter NGT and UPPCB norms are raising the compliance burden, leading to shrinking operations.

5. Labour and Skilling Gaps

• A significant share of the workforce remains untrained and semi-literate, leading to low productivity.

• Poor health and safety awareness, coupled with low technological adaptability, impedes modernization efforts.

How Can India Revive Its Leather Industry?

1. Transform CETPs into CIRCLES

• Upgrade Common Effluent Treatment Plants (CETPs) into Clean Integrated Resource-Conserving Leather Ecosystems (CIRCLES).

• Deploy decentralized Zero Liquid Discharge (ZLD) micro-treatment plants, backed by Viability Gap Funding (VGF).

• Implement digital effluent monitoring linked to a centralized Green Leather Compliance Dashboard (akin to the PARIVESH portal for environment clearances).

2. Position India as the ‘China Plus One’ Destination

• Capitalize on global supply chain diversification by positioning India as a trusted alternative to China in the leather value chain.

• Strengthen eco-compliance, design innovation, and timely delivery standards to attract international buyers.

3. Bridge the Innovation Gap

• Establish a National Leather Tech Hub under CSIR-CLRI in collaboration with the Atal Innovation Mission.

• Encourage partnerships with startups and MSMEs to develop biodegradable tanning agents, chrome-free processing technologies, and smart leather composites.

4. Build an Ethical Luxury Leather Brand

• Launch a "Bharat Leather Mark" to certify sustainable sourcing and ethical labor practices.

• Curate a global marketing campaign — ‘100 Indian Leather Stories’ — spotlighting traditional craftsmanship from hubs like Kanpur, Ambur, and Kolkata.

• Foster Make in India collaborations with global luxury brands.

5. Formalize the Workforce

• Issue Digital Udyog Cards to tannery workers to enable access to skilling programs, health insurance, and social security benefits.

6. Launch a Worker Wellness and Skilling Mission

• Introduce mobile health labs in major leather clusters to improve occupational health outcomes.

• Align skilling initiatives with PM Vishwakarma Yojana to upskill artisans in modern, sustainable leather techniques.

• Expected impact: 30–35% productivity boost, lower attrition rates, and a healthier, future-ready workforce.